Now, I wish to give all of these shares to my son.
How do I record both the basis price and the fair market value (FMV)?
I assume that I record a sale of all the shares at the current basis price
in my account (so I have no capital gain).
And I record a buy of the same number of shares at that basis price in my
son's account (in the US, the basis price carries to the new owner).
How do I record the FMV of the gift? Perhaps: Expense:GIft.
A gift tax return in the US needs both the basis price and the FMV of the
gift.
Do I need to record unrealized gain?
Do I need to adjust Equity:Opening Balances?
Consult your tax advisor. Because you mention gift tax, I assume this is
something above the amount that does not have to be reported.
But I see something that should be discussed (as a general matter)
"Do I need to adjust Equity:Opening Balances?
SOME of us follow the rule of never changing an existing transaction, If
adjustments need to be made, they are made with another transaction. So
yes, if you do it THAT way (with a "journal transaction" directly to
equity, not via an "expense") you would simply use an equity account
(named "adjustments" ?) as opposed to touching "starting equity". Mind,
some of us also don't have this special "starting equity". We open books
with a transaction.
Michael D Novack
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